AMENDMENT NO. 1 TO DEVELOPMENT AND
MANUFACTURING SERVICES AGREEMENT
Amendment No. 1 to Development and Manufacturing and Services Agreement dated as of February 20, 2020 (the “Amendment”), between RHYTHM PHARMACEUTICALS, INC., a Delaware corporation, located at 222 Berkeley Street, 12th Floor, Boston, MA 02116, f/k/a Rhythm Metabolics, Inc. (“RHYTHM”), and Corden Pharma Brussels S.A., a Belgian company located at Rue de Ransbeek 310, 1120 Bruxelles, successor-in-interest to Peptisyntha, Inc. (“MANUFACTURER,” and together with Rhythm, the “Parties”, and each, a “Party”).
WHEREAS, Rhythm and Peptisyntha Inc. have entered into a Development and Manufacturing and Services Agreement, effective as of July 17, 2013 (the “Existing Agreement”), which was assigned from Peptisyntha Inc. to Corden Pharma Brussels S.A. f/k/a Peptisyntha S.A.; and
WHEREAS, the Parties have entered into a Quality Agreement with an effective date of March 29, 2019 superseding all previous quality assurance agreements between them (the “Quality Agreement”); and
WHEREAS, the Parties hereto desire to amend the Existing Agreement to provide for the manufacture of Setmelanotide API lots by Manufacturer on the terms and subject to the conditions set forth herein; and
WHEREAS, pursuant to Section 15.6 of the Existing Agreement, the amendment contemplated by the Parties must be contained in a written agreement signed by an authorized representative of each Party.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Existing Agreement.
2. Amendment to the Existing Agreement. As of the Effective Date (defined below), the Existing Agreement is hereby amended or modified as follows:
Section 2.3 of the Existing Agreement is hereby amended by inserting at the end of such Section the following new Section 2.4:
2.4Manufacture of Setmelanotide API.
(a)Rhythm desires for Manufacturer to manufacture Setmelanotide API on behalf of Rhythm, and Manufacturer desires to perform such service. The Parties will enter into a Work Order that will set forth the material terms of that project (the “Setmelanotide Work Order”), and such Setmelanotide Work Order shall also be subject to the terms of the Existing Agreement, the Quality Agreement, and this Amendment, including, without limitation, the provisions of the milestone schedule attached to this Agreement as Appendix B (“Milestone Schedule”).
(b)Rhythm agrees pay to Manufacturer the applicable success milestone payment set forth on the Milestone Schedule within [***] ([***]) days of the successful completion of each milestone as set forth in Appendix B. The successful completion of each milestone, as defined by the associated deliverable, and the determination of the date of completion shall be governed by the terms of the Existing Agreement and the Quality Agreement, and in particular Section 6 of the Existing Agreement (Testing and Acceptance Process), which – to the extent the respective Work Order covers the performance of Services which do not comprise Manufacturing of Setmelanotide API – may be applied mutatis mutandis for those Service deliverables as may be further described in the respective Work Order. The quality of the Setmelanotide API shall be in accordance with the respective mutually agreed specifications. Due to the nature of the timelines, Rhythm acknowledges that Manufacturer has to timely initiate performance of certain milestones even before preceding milestones are met. Thus, the commencement of a milestone may be independent of the completion of the preceding milestone, and each successfully completed milestone shall be paid for separately.
(c)Rhythm agrees to fund [***] FTEs (as defined below) to be employed by Manufacturer with adequate skills and experience to undertake all tasks associated with the Setmelanotide Work Order. Each of the FTEs shall be dedicated to the Setmelanotide Work Order or other Services agreed upon by Rhythm and shall be fully supported by other site functions and staff of Manufacturer to complete the program. Manufacturer shall invoice Rhythm on a monthly basis commencing on [***]for the FTEs in an amount not to exceed [***] ([***]) per month. In addition, Manufacturer shall invoice Rhythm on or after [***]for a one-time FTE administrative fee in the amount of [***] ([***]). “FTE” means a full-time employee or equivalent individual having the appropriate skill and experience to conduct the specified activity and who is dedicated to the conduct of the specified activity a total of at least [***] ([***]) hours per week.
(d)Notwithstanding Section 14.1 of the Existing Agreement, Rhythm, in Rhythm’s sole and absolute discretion, has the option to terminate the Setmelanotide Work Order and the payments for the FTEs described above at any time after the Effective Date of this Amendment. If Rhythm terminates the Setmelanotide Work Order, Rhythm shall reimburse Manufacturer for the expenses accrued under the Setmelanotide Work Order up to the time of termination and in addition the monthly costs for such FTEs for [***] following termination. If termination occurs between two milestones, then the payment will be for expenses incurred and fees for services initiated before the termination, but in no event shall Rhythm’s reimbursement obligation exceed the amount of fees (but not milestone payments) due at the completion of the milestone during which termination occurred. If Rhythm terminates the Setmelanotide Work Order, Manufacturer shall not be entitled to any other fees or additional milestone payments set forth on the Milestone Schedule for milestones subsequent to termination.
The Parties hereby agree to insert in Section 12 of the Existing Agreement the new Subsection 12.6 to read as follows:
12.6FURTHER LIMITATION OF LIABILITY. SAVE FOR WRONGFUL INTENTIONAL ACTS OR OMISSIONS, EITHER PARTY’S LIABILITY UNDER THIS AGREEMENT